The US government transferred 3,940 BTC to Coinbase Prime earlier today, causing Bitcoin to briefly drop below $61,000 and drawing attention from the market. However, CryptoQuant CEO Ki Young Ju believes that this is unlikely to have a significant impact on the market.
At a little past midnight today, according to data from the cryptocurrency intelligence platform Arkham, the US government’s wallet sent 3,940 BTC (worth $240 million) to Coinbase Prime, indicating the start of a new round of BTC auctions.
Potentially influenced by this news, Bitcoin once again dropped below $61,000 and reached a low of $60,712 at 3 am before rebounding to $61,058 at the time of writing, representing a 1.72% decrease over the past 24 hours.
While it is not possible to track the funds after they are transferred to Coinbase Prime, it is highly probable that they are being prepared for sale. The exact timing of the sale, however, will depend on the official statement from the US government.
Regarding this situation, Ki Young Ju, CEO of the data analysis platform CryptoQuant, stated earlier in a tweet:
“The US government sold 4000 BTC today, but it’s unlikely to have a significant impact on the market. During the peak inflow period of spot ETFs, Coinbase Prime handles 20,000 to 49,000 BTC in seller liquidity per day, and during the low inflow period of spot ETFs, it handles 6,000 to 15,000 BTC in seller liquidity per day. I’m tired of the fear, uncertainty, and doubt (FUD) of ‘government selling’.”
Although Ki Young Ju believes that these bitcoins will not cause drastic fluctuations in the market, the exact quantity of bitcoins that the US government will sell this time is still unclear (its wallet currently holds 213,000 bitcoins, making it the third-largest bitcoin whale in the world). Given the market’s current downturn, any movement could potentially have an impact, and it is worth investors’ continued observation.
On the other hand, the US Marshals Service had previously stated that they would sell encrypted assets in batches rather than all at once to minimize any adverse impact on the market. Jarod Koopman, Director of Cybercrime at the Internal Revenue Service, said:
“We don’t participate in the market; our actions are basically decided based on the timing of the legal process.”